Buoyed by the undeniable success of MySpace and Facebook, mainstream brands are awakening to the commercial possibilities of creating their own social networks – and with the top 25 social networks receiving 5.17 per cent of all Internet visits during October 2007, compared with email services just under at 4.98 per cent (according to Internet monitor Hitwise), brand-led social networks are emerging at a faster rate than ever.

Creating a social networking platform for a brand works on various levels. Firstly, it encourages positive interaction between - ostensibly – advocates of the brand and thus promotes a sense of engagement between customer and brand. Secondly, it offer brands the opportunity to market themselves through their own social spaces without having to worry about their ads appearing next to unsavory content - which has happened on larger networks such as MySpace. We evaluate how different sectors are harnessing branded social networking – and what challenges they face.

Once heralded as a champion of the Internet age, the online travel sector has been hard hit in the last couple of years, and companies in this sector are desperate for more innovative ways to engage with their clients. Orbitz Worldwide recently created a feature called ‘Traveler Update’, designed to enable users to share information on travel arrangements and related issues (see Pearlfinders US 10.30.07). But the sector has been criticized for focusing too much on customer retention rather that boosting traffic, which has inevitably meant that existing customers must spend more.

It comes as no surprise that media groups have quickly latched onto the new trend. MTV Networks is to launch a mobile social network called Con3xion (pronounced 'Connection') targeting viewers of its Latino channel MTV Tr3s (see Pearlfinders US 11.19.07). The digital social network will launch mid-December and be targeted at young Hispanics. Its Nickelodeon Kids & Family Group has pledged $100m over the next two years to develop new games and platforms, as part of a major commitment to the casual gaming space (see Pearlfinders US 08.13.07). The company will launch a host of new web-based games spanning several MTVN brands. And AOL Latino has launched its newly redesigned bilingual website, offering Hispanics an online community built around social networking, blogs, games and photo and video tools to post and share content with families and friends (see Pearlfinders US 10.30.07).

Reuters Group is launching a social networking service - for traders, fund managers and analysts (see Pearlfinders US 08.30.07). The venture has been given the working name "Reuters Space" and is designed to work as a networking tool for the industry as well as serve as a place for blogging and information sharing. We spoke to Global Head of Marketing & Strategy - Reuters Communications Group who told us that the initiative was the first of its kind for a news provider - never before has a media company launched a portal targeting fund managers, traders and analysts. Whilst consumer sites such as Facebook own the user-posted content, he explained that Reuters has the added concern of privacy regulations to consider and this has made rivals of the group wary of setting a precedent.

The CPG sector is also conscious of the potential benefits of social networks - cookie maker Pepperidge Farm has incorporated a social networking site as part of a new marketing campaign that hails its shift from “one-way” to “two-way” marketing (see Pearlfinders US 11.22.07). Its website, artofthecookie.com, hopes to bring its female fans together to bond online and strengthen their engagement with the brand. Creating a dialog with consumers instead of simply forcing messages at them is obviously the ultimate marketing ideal - yet it’s only become fully realizable with the advent of digital. But accusations of pushiness still remain and marketers must tow a very careful line to nudge brand messages to those socializing online without deafening them.

And don’t be fooled into thinking that social networking is the preserve of the young: across the pond, Saga, the British company specializing in holidays and insurance for the over 50's has already made headway in the social media forum. The company has launched Saga Zone, a network that has seen 13,000 of a possible 65,000 Saga magazine subscribers, trialing the site (see Pearlfinders UK 01.11.07). The site has already organized its first flashmob – the phenomenon that involves the sudden collection of a large group of people who perform an unusual action for a brief period of time, then quickly disperse. Saga’s Head of Internet Content told us Saga Digital, the division under which Saga Zone has been created, must improve customer experience for Saga customers spanning a thirty-year age group – and different ages display very different attitudes to online messaging.

Despite the popularity of social networking to establish friendships and connect with people sharing similar interests, professional networking in healthcare is only just opening up. Medicis Pharmaceutical Corporation recently decided to begin marketing its Restylane anti-wrinkle treatment to consumers for the first time (see Pearlfinders US 07.27.07). Historically, Restylane has been promoted in stores and through branding / packaging, but the latest announcement is a seismic shift in its marketing strategy - the company wants to reach out to consumers across a variety of media, including new media. Although there are many professional social networking sites dedicated to the pharmaceutical industry, few brands have so far created their own spaces – we see pharmaceuticals as the next sector for this trend to heavily populate.

Making the decision to launch a social, commercial network tool requires careful consideration - social networks are largely unregulated and carry the risk of generating more negative comments about the brand than positive. Nobody is truly convinced that visitors to a utility firm’s social network will log on in order to wax lyrical about that brand – the reality is that it provides an open messaging board for complaints. The power of opinion on social networking sites means that any criticism could lead to the rapid destruction of a carefully built reputation. In certain cases, brands have been seen to set up social networks more because they feel they should rather than because there’s any real evidence consumers want it. Which beggars the question: how do you prevent branded social networks from becoming a tired and ritualistic move rather than an innovative route to customer engagement? If your agency has the capabilities to ensure that brands are successfully differentiating their social network tools and – equally, if not more importantly – can establish what consumers expect from a social network from the outset, now’s the time to begin delivering your ideas to brands considering social networking as a viable marketing channel.